For an unlisted company, Ellume certainly knows how to keep ASX investors talking. The Brisbane-based health company also made news last year. This was due to its announcement that the United States Food and Drug Administration (FDA) had endorsed one of its products.
As we discussed at the time, Ellume specialises in rapid diagnostic technology. The company had developed a rapid test for the COVID-19 infection. The test only costs around US$30. It can reportedly detect traces of coronavirus in as little as 15 minutes with a 94% sensitivity in detecting infection.
Following that endorsement from the FDA, Ellume ramped up plans to send more than 100,000 of its tests to the US. At the time, Ellume planned on delivering more than 5 million tests every month by March 2021. Ellume was (and remains) the first and only company that the FDA has licensed to produce 'at-home' COVID tests.
Ellume gets another green light from the USA
Today, Ellume has received more good news.
According to reporting in the Australian Financial Review (AFR) today, the Biden administration has inked a US$230 million deal with Ellume for increased testing. The report states that the White House is aiming for "mass production" and "slashed costs" with the deal.
It also sees it as a "critical way to reopen large parts of America's battered economy". Apparently, the Ellume test involves a nasal swab that is inserted into a cartridge and linked to a smartphone app. The White House is quoted in the AFR stating that this is a "chicken and egg problem that we have actually taken a step to solve today".
Now Ellume has signed this deal, it will reportedly enable the company to build a US-based factory. The company is expecting to deliver 8.5 million COVID-19 testing kits. Until the factory is built, the company will deliver 100,000 tests a month from Australia.
This comes after the company told the AFR that it is on track to deliver roughly 200,000 tests per day "this quarter". When the factory is completed and reaches full capacity, it will be able to produce as many as 19 million tests per month.
Ellume founder and CEO Dr. Sean Parsons had this to say on the deal:
We are prioritising our partnership with the U.S. government to mobilise tests quickly and in the most impactful way… We will fulfill the order for these tests at the same time as we ramp up the output across our production facilities, creating more possibilities for retail and private institution use in the future.
Possible ASX flow-on effects
Even though Ellume is an unlisted company, its good fortune appears to be having some flow-on effects.
Shares of a blood-testing company Atomo Diagnostics Ltd (ASX: AT1) are up almost 2% today. Shares of another diagnostic testing manufacturer, Anteotech Ltd (ASX: ADO), are in a trading halt today "pending a further announcement".
So stay tuned to this sector!
